Although COVID-19 brought along a sharp decline in the export of both products and services, the economy of Estonia and export figures sustained well under the more difficult economic conditions, becomes apparent from a recent export study.
“The crisis has been a challenge for all Estonian companies, yet it is good to see that in the final quarter of last year the export of goods increased considerably. Our entrepreneurs have successfully managed to adapt to the new conditions, demonstrating our economies overall strength,” said the Minister of Entrepreneurship and Information Technology Andres Sutt. According to the Minister, the most affected have been the transport and travel sectors, yet overall the export figures and the economy have adjusted quite well.
The companies engaged in development activities and those increasing their output are most to gain from the crises, according to the Minister. “Further, opportunities associated with the Green Turn will give a considerable contribution to optimizing business activities and to growing the profits associated,” he added.
From the perspective of all the sectors studied, the most sought-after markets were the ones of Sweden, Germany, Finland and Norway. “Though more distant markets
of Japan, China or the USare less prominent, we are seeing that the interest is on the rise. In order to spread the risk, it is wise to diversify one’s export destinations,” said the Head of Estonia’s Export Agency Enterprise Estonia Peeter Raudsepp.
From the experience of Enterprise Estonia, the interest towards specific markets varies by sector. “For example, the Information and Communication Technology sector is most interested in the markets of Japan, United States, India and Central Europe. Metal and machinery sectors are focusing on the Scandinavian markets and food sector is mainly looking towards Asia,” explained Raudsepp.
Comment from industrial associations
Triin Ploompuu, Manager at Federation of Estonian Engineering Industry:
Estonian economy got through the year 2020 so well only thanks to the manufacturing industry. The managements of companies faced many challenges and changes – how to deal with COVID-19, how to manage communication between home offices and production facilities, how to sell and market virtually.
Best managed the executives, who took on the goal to use the unprecedented situation to better and develop their company and used the time to implement necessary changes. Investment projects and development of products under companies own brands were also continued.Further, the interest grew in the domain on digitalization, automation and use of robotics. Active projects in the domain were accelerated.
Although at times it seemed that communication and logistics was bounded by our target markets and clients, the companies operating in machinery and metal industry were engaged in improving their internal processes.
The year 2021 began for the sector with raising demand, which in turn increased the need for both engineering now-how and skilled workers. The year 2021 deems to be an interesting one, allowing us to witness the grow of some manufacturing companies, emergence of interesting industrial solutions and product developments.
Doris Põld, Estonian ICT Cluster Manager, Estonian Association of Information Technology and Telecommunications:
According to the Bank of Estonia the export of services decreased in the 4th quarter by 21%. Yet, the stable growth of telecommunication and IT-services continued in the 4th quarter (3.6%) and the export of other business services increased (10%).
The biggest contributor to the total turnover of foreign trade was the increase in the import of services. This was caused by purchases of large volumes of IT hardware. In the ICT sector there was an increase in the number of people engaged in the sector as well as billable hours.
For example, companies offering software development and telecommunication have seen growth. Yet, for companies offering consultation and software development services, their condition is directly tied to their client’s sector condition.
In both the national and export view, the ICT sector has been in a supporting role and dependent on the demands of other sectors.
For the development of this sector, supporting the digitalization and automatization of the economy as a whole is one of the most important aspects.
We saw that the onset of last year’s crisis was best overcome by clients with higher level of digitalization. The novel situation has made the clients think how they can make their business contactless as well as more resilient to crises. ICT companies can certainly help to realise this goal.
The goal of the export study was to map the factors supporting and inhibiting Estonia’s exports and see how they have changed over the recent years. This study was requested by Enterprise Estonia, the Ministry of Economic Affairs and Communications, the Ministry of Foreign Affairs and it was carried out by Ernst & Young Baltic AS and Policy Lab OÜ.
See original article here.